WeightedCCI_v1

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Author: Copyright � 2005, Luis Guilherme Damiani
WeightedCCI_v1

The Weighted WCCI is a sophisticated technical analysis tool designed to help traders visualize price momentum and identify significant trend directions. Unlike standard indicators that look at price movement in isolation, this script combines multiple layers of data—specifically smoothed momentum, volatility-based weighting, and historical benchmarks—to provide a clearer picture of market behavior.

Core Mechanics and Logic

1. Multi-Layer Momentum Tracking The indicator simultaneously calculates two distinct versions of the Commodity Channel Index (CCI):

  • Standard CCI: A traditional measure of current price relative to its average over a set period.
  • Turbo CCI: A faster-reacting version of the same metric, designed to pick up on quicker shifts in market sentiment.

2. Dynamic Volatility Weighting One of the unique features of this script is its use of "Weighting." It compares current market volatility (using the Average True Range) against historical volatility from a longer timeframe. By calculating this ratio, the indicator automatically scales the strength of the momentum signals. This helps normalize the data, ensuring that high-volatility "noise" doesn't distort the visual representation of the trend.

3. Signal Normalization (Capping) To prevent the indicator from becoming visually overwhelming during extreme market spikes, the script includes a safety mechanism that "caps" the values at specific overbought and oversold levels. This keeps the data within a readable range while still highlighting when the market is stretched to its limits.

4. Trend Counting and Tracking Beyond just providing a visual line on a chart, the script actively monitors the direction of the price action in real-time. It tracks how many consecutive bars the price has maintained a specific direction (Up or Down). This logic translates complex price movements into a simple, readable status update: it tells you exactly which way the trend is moving and for how long it has persisted.

Visual Elements

The script populates several data "buffers," which allow it to display multiple elements simultaneously in its own window:

  • Momentum Lines: Distinct lines showing both the Turbo and Standard CCI movements.
  • Histograms: Visual bars that help emphasize the strength of the primary indicator.
  • Reference Levels: Horizontal boundaries (Trigger levels and Overbought/Oversold levels) that act as visual cues for when price action might be reaching an extreme or requires a change in perspective.

Summary for the User

In essence, this tool takes raw market data and subjects it to three filters: speed (Turbo CCI), volatility (Weighting), and persistence (Trend Counting). The result is a smoothed, adjusted view of market momentum that seeks to filter out "fake-out" movements, helping you see the underlying trend more clearly.

Indicators Used
Commodity channel indexIndicator of the average true range
Miscellaneous
Implements a curve of type %1
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WeightedCCI_v1 
//+------------------------------------------------------------------+
//|                                                Weighted WCCI.mq4 |
//|                         Copyright © 2005, Luis Guilherme Damiani |
//|                                      http://www.damianifx.com.br |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2005, Luis Guilherme Damiani"
#property link      "http://www.damianifx.com.br"

#property indicator_separate_window
#property indicator_buffers 8
#property indicator_color1 Red
#property indicator_color2 DodgerBlue
#property indicator_color3 CadetBlue
#property indicator_color4 Red
#property indicator_color5 Red
#property indicator_color6 RoyalBlue
#property indicator_color7 RoyalBlue
#property indicator_color8 PaleGreen

//---- input parameters
extern int       TCCIp=7;
extern int       CCIp=13;
extern double    overbslevel=200.0;
extern double    triglevel=50.0;
extern double    weight=1.0;
//---- buffers
double ExtMapBuffer1[];
double ExtMapBuffer2[];
double ExtMapBuffer3[];
double ExtMapBuffer4[];
double ExtMapBuffer5[];
double ExtMapBuffer6[];
double ExtMapBuffer7[];
double ExtMapBuffer8[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function                         |
//+------------------------------------------------------------------+
int init()
  {
//---- indicators
   SetIndexStyle(0,DRAW_LINE);
   SetIndexBuffer(0,ExtMapBuffer1);
   SetIndexLabel(0,"Turbo CCI");
   SetIndexStyle(1,DRAW_LINE,1,2);
   SetIndexBuffer(1,ExtMapBuffer2);
   SetIndexLabel(2,"CCI");
   SetIndexStyle(2,DRAW_HISTOGRAM);
   SetIndexBuffer(2,ExtMapBuffer3);
   SetIndexStyle(3,DRAW_LINE,1,2);
   SetIndexLabel(3,"CCI");
   SetIndexBuffer(3,ExtMapBuffer4);
   SetIndexStyle(4,DRAW_LINE,1,2);
   SetIndexBuffer(4,ExtMapBuffer5);
   SetIndexStyle(5,DRAW_LINE,STYLE_DASH,1);
   SetIndexBuffer(5,ExtMapBuffer6);
   SetIndexStyle(6,DRAW_LINE,STYLE_DASH,1);
   SetIndexBuffer(6,ExtMapBuffer7);
   SetIndexStyle(7,DRAW_LINE,STYLE_DASH,1);
   SetIndexBuffer(7,ExtMapBuffer8);
   
   SetIndexDrawBegin(0,50);
   SetIndexDrawBegin(1,50);
   SetIndexDrawBegin(2,50);
   SetIndexDrawBegin(3,50);
   SetIndexDrawBegin(4,50);
   SetIndexDrawBegin(5,50);
   SetIndexDrawBegin(6,50);
   SetIndexDrawBegin(7,50);
   
//----
   return(0);
  }
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function                       |
//+------------------------------------------------------------------+
int deinit()
  {
//---- 
   
//----
   return(0);
  }
//+------------------------------------------------------------------+
//| Custom indicator iteration function                              |
//+------------------------------------------------------------------+
int trend_counter=0;
string trend="ZERO";
int start()
  {
   
   int    counted_bars=IndicatorCounted();
//---- check for possible errors
   if(counted_bars<0) return(-1);
//---- last counted bar will be recounted
   //if(counted_bars>0) counted_bars=-1;
   int limit=Bars-counted_bars;
   //if (limit>Bars-CCIp-1)limit=Bars-CCIp-1;
   //Comment(Bars+"    "+limit); 
   double Kw=0.0;
   int alt=0;
//---- 
   for (int shift = 0; shift<=limit;shift++)
   {  
   
      double CCI=iCCI(NULL,0,CCIp,PRICE_TYPICAL,shift);
      double TCCI=iCCI(NULL,0,TCCIp,PRICE_TYPICAL,shift);  
     
      if (weight==0)Kw=0; 
      else
      {  Kw=weight*iATR(NULL,0,7,shift)/iATR(NULL,0,49,shift);
         CCI=CCI*Kw;
         TCCI=TCCI*Kw;
      }
      if(TCCI>overbslevel+50)TCCI=overbslevel+50;
      if(CCI>overbslevel+50)CCI=overbslevel+50;
      if(CCI<-overbslevel-50)CCI=-overbslevel-50;
      if(TCCI<-overbslevel-50)TCCI=-overbslevel-50;
      ExtMapBuffer1[shift]=TCCI;
      ExtMapBuffer2[shift]=CCI;
      ExtMapBuffer3[shift]=CCI;
      ExtMapBuffer4[shift]=overbslevel;
      ExtMapBuffer5[shift]=-overbslevel;
      ExtMapBuffer6[shift]=triglevel;
      ExtMapBuffer7[shift]=-triglevel;
      ExtMapBuffer8[shift]=0;
      
      if (shift==0)
      {	if (CCI>0) 
		    if (trend=="UP" && limit>1)trend_counter+=1; else {trend_counter=1;trend="UP";}
	        else if (trend=="DOWN" && Bars-counted_bars>1) trend_counter+=1; else {trend_counter=1;trend="DOWN";} 	
      
	      Comment("CCI is trending ",trend," during last ",trend_counter," bar(s)");
      }		
   }
//----
   return(0);
  }
//+------------------------------------------------------------------+

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